We would all like to own our home, but the process is not always so easy. Most lenders now require a large deposit, and on top of that, they would love you to have a perfect credit score. Not many of us have that perfect credit store, however, it is important to be familiar with the top 10 ways to repair your credit so that you can qualify for a home mortgage.
Step 1
Get real – find out what out your actual credit score. There are quite a few agencies that can help you with that, and it might be a good idea to ask a potential lender who they work with. This ensure that you are looking at the same information that you are.
Step 2
How well do you know your finances. Most people don't know their finances, and you may have a few surprises instore. Set up a spreadsheet and record EVERYTHING that you spend. Now you can see where you are spending the most money.
Step 3
Start saving some money. Once you have identified where you can save money, start by actually saving that money. Put it aside every month, and start a saving account. This can really impress a lender, it shows that you are taking an interest in your finances.
Step 3
Are you paying your bills on time? If you are not make sure that you start doing so, and keep the practice up. It will quickly improve your credit score.
Step 4
Don't close unused accounts. Once you have paid off a credit card, it can be tempting to close the account down. But, even unused accounts are useful, they will show a zero balance and will impress a future lender.
Step 5
Don't apply for too many credit cards or accounts. It often has a negative effect, and all of those searches will show up on your credit report.
Step 6
Have you been divorced? Tell the credit company as sometimes credit which your former spouse may have applied will show up.
Step 7
Are you having a credit problem? Don't ignore your lender, speak to them and communicate with them in writing. Once you have started to make regular payments.
Step 8
Student loans may be following your around for a long time. It is a big problem, but can you do something to help yourself? Negotiate with your lender and ask if you can pay a bit extra towards your student debt every month. The advantage is that many lenders are happy to reduce their interest rate a little bit. Even a small reduction will help you to pay off that loan quicker and cheaper.
Step 8
Do you need a new car? Are you absolutely sure? You may be able to buy a second hand car for cash, instead out finance. After all, is it not about having a new car, it is about buying a home.
Step 9
It may seem odd, but a lot of people do not question the amount of tax they pay. Saving money on tax will allow you to save more money towards your home. Keep any paper work the process generates, it will prove that you are financially savvy.
Step 10
Keep your personal information to yourself. So many people these days make it their business to borrow your credit history or your personal details. You may have a nasty surprise when you go to try to get a home mortgage, it is all too easy to for some to use your personal information and take out loans in your name. This is more common than you might think, and the process of getting the details removed from your file can be complicated.
Above all, appreciate that credit agencies should be used to your advantage. Figuring out how you can make yourself look good to a potential lender. The top 10 ways to repair your credit so that you can qualify for a home mortgage, is all about getting financially savvy.